Meet the Press, Meet the Press, August 2, | Alexander Street, a ProQuest Company
Below I have paraphrased parts of the Larry Summers interview from the January 25th segment of Meet The Press (questions and answers. (Photo by Alex Wong/Getty Images for Meet the Press) * Local Caption * David Gregory;Lawrence Summers - Meet The Press. On this edition of Meet the Press: Larry Summers discusses the economy; Dan Balz, , in Meet the Press (New York, NY: NBCUniversal, ), 59 mins.
So we worked to encourage a variety of economists, including Stiglitz, to offer larger estimates of what was appropriate, as reflected in the briefing memo I prepared for Obama. I cannot see the basis for the argument that a substantially larger fiscal stimulus was feasible. And the effort to seek a much larger one certainly would have meant more delay at a time when the economy was collapsing — and could have led to the defeat of fiscal expansion.
While I wish the political climate had been different, I think Obama made the right choices in approaching fiscal stimulus. So I would expect Stiglitz to be well aware that hindsight is clearer than foresight. What about the Clinton administration record on financial regulation?
Why women are poor at science, by Harvard president
With hindsight, it clearly would have been better if we had foreseen the need for legislation like the Dodd-Frank reforms and had a way to enact it with a Republican-controlled Congress. Certainly we did not foresee the financial crisis that came eight years after we left office. Nor did we anticipate the ways in which credit default swaps would mushroom after We did, however, advocate for GSE reform and for measures to rein in predatory lending, which, if enacted by Congress, would have done much to forestall the accumulation of risks before I have not seen a convincing causal argument linking the repeal of the Glass-Steagall Act and the financial crisis.
Yes, Citi and Bank of America were centrally involved, but the activities that generated major losses were fully permissible under Glass-Steagall. And, in important respects, the repeal of Glass-Steagall actually enabled the resolution of the crisis, by permitting the merger of Bear and Merrill Lynch and by allowing the US Federal Reserve to open its discount window for Morgan Stanley and Goldman when they otherwise could have been sources of systemic risk.
With the benefit of hindsight, I wish we had not supported this legislation. But, given the extreme deregulatory approach of President George W. It is also important to recall that we pursued the legislation not because we wanted to deregulate for its own sake, but rather to remove what the career lawyers at the US Treasury, the Fed, and the Securities and Exchange Commission saw as systemic risk arising from legal uncertainty surrounding derivatives contracts.
More important than litigating the past is thinking about the future. We cannot rely on interest-rate policies to ensure full employment. We must think hard about fiscal policies and structural measures to support sustained and adequate aggregate demand. He was a great supporter of Harvard and a very good friend to me.
I feel his loss in a profound way. In a group of distinguished people, Dick was a towering figure. He was wise, pithy and clear in all his statements. Dick was a very good friend to me. During my time as Harvard president he taught me much about treating people right, about fundraising, about setting priorities and about leadership. Knowing Dick, I was not surprised to learn from his obituary that he had been a hero for civil rights, civility and public schooling in North Carolina.
In the last long decade I saw Dick only every couple of years. He would drop by my office when he was visiting Harvard.
He would always insist on waiting while I finished up a conversation with a stray sophomore. Then we would talk about Harvard, politics and family. As I became more involved in the business world, he gave me some of the best advice I have ever received. Dick Spangler may be gone but his influence will endure through the many people he made better. I am proud to have been his friend.
If ever there was a disconnect between underlying reality and what is happening in financial markets, it is the boom in Puerto Rican debt which has nearly doubled the value of some of its debt securities over the last few months. I would also note that much of what the Obama administration proposed for example, more infrastructure spending and responsible tax reform would have triggered even greater economic growth but never came to pass, largely due to congressional roadblocks.Presidential counsel - Lawrence H. Summers speaking at GCGC 2018
There was certainly more that could have been done. That is, the problem has not primarily been a shortage of capital and labor inputs into production, but rather slow growth in output, given inputs. While TFP has fallen off rapidly, there is no basis for supposing that levels of labor input or capital are less than one would expect given the magnitude of the Great Financial Crisis. Second, perhaps the biggest surprise of the last few years has been the remarkably low rate of inflation even as the unemployment rate has reached 4 percent.
Blog | Larry Summers
Year after year, consensus and Federal Reserve Board forecasts of inflation have fallen short of predictions. If, as the CEA believes, our slow economic growth is a result of too little supply of labor and capital, one would expect surprisingly high, rather than surprisingly low, inflation as demand growth collided with constricted supply. This is the opposite of what we observe. On the other hand, the secular stagnation hypothesis that emphasizes issues on the demand side would predict exactly the combination of sluggish growth, low inflation and low capital costs that we observe.
We have to remember, these are terrorists who, who have attempted to kill Americans. And, and unilaterally saying we're going to close Gitmo in a year, without knowing how we're going to deal with them, where we're going to house them, how we're going to try them, I think keeps a campaign promise but may be irresponsible.
Do you think that the president is making America less safe in taking this step? We don't know where the prisoners are going to go, and, and--nor how they're going to be tried.
You know, if, if the liberals in America believe that Gitmo ought to go, then maybe we ought to just open Alcatraz and move those prisoners there. Now it's a national park and not really suitable for prisoners, however. Let me ask you, before you go, about the future of the Republican Party. What is the way back? The way back is to be able to communicate with the American people about who we are and what our principles are.
You know, the principles I grew up with are the principles of the Republican Party, even though I grew up as a Democrat. And I've got 11 brothers and sisters, my dad owned a bar. I've had every rotten job there was in America, but thankful that I had each of those jobs. And, and you know, most Americans think that if you work hard, you play by the rules, you got a really good chance of getting ahead.
And, and I don't want our party to be the party of no. I want our party to be the party of better ideas, better solutions. There are issues, a lot of issues that Americans are concerned about, and I think as a political party we have to be willing to put out--either work with the administration, work with our colleagues on the other side of the aisle or, if we disagree, then what's our better solution for the American people?
And at the end of the day, I do think we have some better solutions. And over the coming months, I think the American people will see more of them. And in the meantime, are you rooting for President Obama?
I am, because we need him to succeed. America needs him to succeed. We, we are, we are facing the most difficult challenge that we've faced over the last 50 years. It's important that, that America wins, and that means everybody in this town needs to work together to ensure that we help America win this fight that we're in.
Congressman Boehner, good luck to you in your work as well. Coming next, week one for the new president: Insights and analysis from our roundtable: Welcome to all of you. Glad to have you here. Good to be here.
So here was a cartoon that struck us from The Oregonian newspaper. It's President Obama at his desk in the White House there, and you see all the stuff on the floor. Michele Norris, the economy is job one, and we've heard from Larry Summers and Congressman Boehner, these are tough issues. And he laid it out just how tough they were. I mean, I was struck listening to him doing his inaugural address, how somber the language was in, in really explaining to people that the worst is yet to come; saying it once, saying it twice I mean, the difficulty that he has--that he faces now is that the "Yes we can" president has to convince the "No we won't" Republicans that they need to sign on to the stimulus package.
He's got a lot of capital at this point. He made that clear when he sort of exercised that great confidence in that room when he met with Republicans this week. But there's a lot of negotiating that has to go on, and it, it--the, the focus on the stimulus package, the focus on infrastructure, the vulnerability that he has is, is the things that we just heard Congressman Boehner talk about.
Some of the social programs, in making good on some of those promises that he made throughout the campaign to focus on education and health care and some of these other social issues, and to funnel money to the cities.
And, Tom Friedman, there's also a psychological problem here, which is that the government is saying to consumers here in America, businesses in America and around the world, "We need you to do something you're uncomfortable with.
You know, you're doing the prudent thing now, you're saving money, you're not spending as much, you're not borrowing the way you used to, which got us into the mess, but we need you to do those things right now because we're in a lot of trouble.
Well, I think consumers understand, all voters and savers understand there is something new here. We, we haven't been to this play before. And I would say it's because this economic crisis combines four things at a scale we've just never seen: We've never seen this much leverage from this many institutions, on a global basis, wrapped in this much complexity--derivatives these guys didn't understand when they were going up, let alone when they're going down--and it was all started in American.
Not Thailand or Korea or Mexico, where we can protect ourselves, but started here. And when it starts here, no one can protect yourself.
I tell you, you take this much leverage, wrap it in this much globalization, in this much complexity and start it in America, and grandma's investing advice doesn't apply. Everyone who bought on the dips has gotten creamed. And that's why--I've said this before, I will say it again: This moment we're in right now reminds me of that moment in the movie "Jaws" where Roy Scheider first sees the great white shark and he walks up to the captain's cabin, his eyes wide with fear, and he says, "You're going to need a bigger boat.
Conservatives may have to leave their conservative principles at the door here. Well, I think that the risk for the Obama administration at this point is that they buy this bigger boat and then buy all sorts of other smaller boats and give them to political interests.
And that, I think, is a concern, and you heard John Boehner talk about it. And I think that is--when you're looking at the situation we're in, and I agree with Tom in his basic assessment of it, you're talking about fundamentally reorienting the relationship between the U.
And the fact that this happened under a Republican president, at least initially in terms of the bailouts, in terms of the TARP, you can take The Oregonian cartoon, actually, and say, "Yes, he left President Obama with a lot to do.
But he also, in, in effect, gave him tremendous cover with which to do it. This is a Republican administration. And you hear Obama administration representatives talk about the opportunity. They keep using the word opportunity There are big challenges in the Middle East as well, and the president spoke about them with his new secretary of State, Hillary Clinton, at the State Department; a very symbolic move.
He goes to the State Department with the vice president and says, "Diplomacy is back. But time is running out. And you write this in your column this morning in The New York Times: Hamas is busy making a two-state solution inconceivable, while the settlers have steadily worked to make it impossible. Well, you know, this is going to be an enormous challenge, because I think we are at a stage right now in the Arab-Israeli peace process, David, where only presidential leadership is going to make a difference.
I'm a huge fan of George Mitchell. He did--he's been appointed now the Middle East special envoy. I think he can set the table for a lot. But ultimately, Obama is going to have to get involved if he really wants to break the deadlock, because we're in a very different situation right now.
The parties have never been more broken. If you want to be a peace maker today, it's not the days of Henry Kissinger; you fly to three capitals, talk to three kings, dictators or prime ministers, you strike a deal. Right now Hamas and Fatah on the Palestinian side is completely broken, you got to do nation-building between them.
Second thing you're going to have to do is bring Hamas somehow into a Palestinian national unity government, otherwise the Palestinians are not going to make a decision. And lastly, you've got Iran lurking back there and Syria, so the next--or Secretary of State Clinton, the next president's going to have to think about how we bring them in or isolate them. It's so much more complicated. I don't believe it can be done without real presidential involvement, and that's going to be very hard for a president whose job one right now rightfully is focusing on nation-building in America, not nation-building in Palestine, Israel.
- Larry Summers’ blog
- 'Meet the Press' transcript for Jan. 25, 2009
And it's going to be, I think, particularly hard because of the things that President Obama has said about Hamas in the past. If you remember back in April, Jimmy Carter made a trip, he, he met with Hamas leaders, and Barack Obama said, "Hamas is a terrorist organization. Hamas is not a state. That's going to be, I think, very difficult for him to do, not least of which because he's going to have Republicans and Jewish leaders say There was one thing, though, that was symbolic this week, though.
The first phone call he made on his first day in office was to Mahmoud Abbas. He called him before Ehud Olmert. The leader of Fatah on the Palestinian West Bank.
And that was--you know, even though he said that "my first order of business is going to be focusing on the economy," the fact that that was the first call he made sent an important And you talk about symbolism. This was a portion of his inaugural address where he mentioned, I think, for the first time the Muslim world. To the Muslim world, we seek a new way forward based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict or blame their society's ills on the West, know that your people will judge you on what you can build, not what you destroy.
To those, to those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history, but that we will extend a hand if you are willing to unclench your fist.
What struck you about that, Michele? Several things struck me about that. First, the difference in tone from the last two inaugural speeches that we've heard. But talking tough, but at the same time extending a hand through the kind of language that says, "We are willing to work with you.
We are willing to sit down, we are willing to engage with you. Many people expected--and, and there was some, as I understand, tension within the incoming administration about the language that he should use there, whether it should be inclusive, whether he should use that pulpit on that day to say exactly that. Clearly, he decided that he wanted to send that message and it was important to do that. But, Steve Hayes, it's still an interesting question. I've heard Republicans say, "We'll see how much different Obama one is from Bush two," in terms of diplomatic approach to the rest of the world.
I, I think that, that is a key point. I think you're much more likely to see tremendous continuity across the spectrum of foreign policy issues, whether it's on how to deal with, with rogue states. I mean, people have, I think, a misimpression that the Bush administration under Condoleezza Rice as secretary of State was not engaged with diplomacy with Iran, was not engaged with diplomacy with North Korea. Now, I don't think it was terribly successful, but it was happening.
So I think you're much more likely to see it. You're likely to see it, I think, at a stepped-up level. But this is much more about continuity, I think, than it is about dramatic change, as we--as we were led to believe in the campaign. Tom Friedman, one are the new realities for a new president is governing is different than campaigning. Obama spent his first few days in office rolling out an orchestrated series of executive orders intended to signal that he would take the nation in a very different direction from his predecessor, George W.
Yet he wrestled with fresh challenges at every turn. It did not take long for the new president to discover that there were limits to his power to turn his campaign rhetoric into reality.
It's something John McCain would have done as well. But as he's admitted, it's not so easy. It's not so easy. It's, it's clear, though, David, we do need a rule of law framework that is both legitimate, transparent and has a, a degree of consensus in this country that can govern the new war we're in from apprehension of, of terrorists and terror suspects to detention to interrogation to prosecution to release. And we've been kind of making it up as we've gone along, and I, I have some sympathy for that.
It's been a very complicated problem. But I think now is a good time to step back, but to do it in a, I think, sober way. We need to remember always, I think, three things: We also have to remember who they are. These are not the poor and crippled newsboys we're fighting, OK? This is not the KGB.
This is a very different enemy that chops people's heads off and puts it on the, on the Web, OK? And lastly, I think we do have to remember one other thing: You'll be taking off more than your shoes at the airport.
So I think we got to balance all those things. I'm glad the president's saying let's start over. He's, he's carved himself some wiggle room in there, too, by saying, "We're not going to torture anymore, but we're going to bring the experts together and let's figure out exactly how we do this. I, I, I admire him for taking this step. And it is interesting, because he's left the door open, Steve Hayes, for some of the harsher interrogation techniques to still be used by the CIA; even though they're saying it's got to be--interrogators should use the Army field manual, there's still the opportunity to use those other techniques.
That is--I think that is a key question, and hopefully we will never find out. But what's interesting about the, the situation he finds himself in with this loophole, in a sense, that he's created The Wall Street Journal called it the "Jack Bauer exception"--the need to use harsh interrogation techniques, perhaps, if an attack is imminent--we don't yet have an answer from him as to whether he will use it, whether he would use those techniques.
And we heard a lot of rhetoric on the campaign that such things were abhorrent, and this was really, I think, part of the foundation of the criticism for the Bush administration. It's interesting to me and I think a sign of, of just how difficult governing is going to be that he has not closed that loophole and, in fact, has deliberately left it open.
I think the lawyers call that purposeful ambiguity. But, Michele, let's talk about the fact that lobbyists are right up there with journalists and lawyers right now in terms of their favor in the city under this new administration.
This is what then candidate Obama said--this was in November of about lobbyists. I am in this race to tell the corporate lobbyists that their days of setting the agenda in Washington are over.
I have done more than any other candidate in this race to take on the lobbyists, and I have won. They have not funded my campaign, they will not work in my White House and they will not drown out the voices of the American people when I am president.
On day one, in fact, he comes in, signs an executive order. This is how The New York Times reported on it: Critics pounced, including John McCain, who said this: While I applaud the president's action to implement new, more stringent ethical rules, I had hoped he would not find it necessary to waive them so soon.
The waiver, the waiver is clearly--it's spelled out if you read the directive, the ethics directive. It's clearly spelled out in there. If you judge Barack Obama by the statement that you aired there, which I believe was from November of